N.H. Lawmakers Still Seeking School Finance Solution

The upcoming session of the New Hampshire legislature should reveal
whether the just-concluded November elections will change the state's
response to the challenge of financing public education.

Nearly a year after New Hampshire's highest court declared the
school funding system unconstitutional, the legislature has yet to come
up with a plan to revamp it.

Some observers are hopeful the elections may have changed the
balance of views enough to break a political and policy stalemate over
the terms of any solution. Last year, the high court ordered the
legislature not only to produce a new plan for financing schools, but
also to carry it out, by April 1, 1999.

"The political winds have changed. We have a new state Senate," said
Paul W. Krohne, the executive director of the New Hampshire School
Boards Association. "We're interested in the '99 session being given
this chance to come up with an acceptable solution despite the fact
that the '98 session had the same chance and blew it."

Soon after the Nov. 3 elections, plaintiffs and defendants in
Claremont School District v. Governor refocused attention
on the school funding case by filing new requests with the state
supreme court.

New Court Action

On Nov. 9, Gov. Jeanne Shaheen, the Democrat who was re-elected this
month to another two-year term, asked the court to extend by two years
the deadline for the legislature to fix the problem.

The governor wants the extension, said Judy E. Reardon, the legal
counsel for the governor's office, so a question on public financing of
education can be put before voters during the presidential primaries in
2000. Critics say Ms. Shaheen just wants more time to push through a
constitutional amendment that would keep the current funding system in
place. A hearing on the extension request was scheduled for this
week.

Meanwhile, on Nov. 10, the school district plaintiffs asked the
court to enact a plan to place state funding in receivership,
essentially allowing the court to take money from the state treasury
and give it to the schools if the legislature isn't able to meet its
April 1 deadline.

"We think the receiver has to be up in place and running by July 1,
1999," said Andru H. Volinsky, a lawyer for the five districts that
sued the state for failing to provide an "adequate education" for all
children as guaranteed in the state constitution.

In New Hampshire, the education finance conflict stems from the fact
that 90 percent of the money that goes to public schools comes from
local property taxes. The state supreme court ruled the finance system
unconstitutional last December, saying variations in local property-tax
rates led to inequitably funded districts.

State Taxes?

But while most state lawmakers agree that the state should take on
the responsibility of paying for schools, they disagree on how to do
it. This year, lawmakers proposed about a dozen plans for new taxes to
pay for education, ranging from combinations of income and property
taxes to taxes on capital gains and dividends. A proposed
constitutional amendment, which would have kept the current local
property-tax system but required the state to come up with money to
remedy inequities in school funding, was defeated just before the
legislature adjourned in September.

"The state in effect has a financial obligation--estimated between
$800 million and $1 billion dollars--to pay for education," said Sen.
James W. Squires, a Republican who was just re-elected and who has
served on two commissions charged with estimating the cost of an
adequate education. If the state takes on that obligation, it will need
to double its overall spending, he argued. (New Hampshire's fiscal 1999
budget is $966.5 million.) "The question is, 'From whence comes the
money?'" added Mr. Squires, who believes it should be generated by a
mix of new and existing taxes.

The legislature, which starts its next session Jan. 6, typically
meets for five months each year, although this year it met for nine,
mostly because of school finance.

While Republicans controlled the Senate in 1998, thanks to the
recent elections, Democrats will have a majority--13 to 11--in 1999,
which could change the atmosphere for school finance discussions, Mr.
Krohne said. The newly elected House will continue to have a Republican
majority, as it did this year.

Two Democrats--Mark Fernald, a lawyer, and Clifton Below, a state
representative--were just elected to the state Senate on platforms that
promoted passing new taxes to pay for education--a bold move in a state
with no income tax.

Gov. Shaheen, on the other hand, believes new taxes aren't
necessary. "One of the things the governor is open to is allowing
limited video gambling" to raise education funds, Ms. Reardon said. The
state currently has a lottery and four racetracks, but no casinos, she
said.

Vol. 18, Issue 13, Pages 14-15

Published in Print: November 25, 1998, as N.H. Lawmakers Still Seeking School Finance Solution

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